HomeMy WebLinkAbout20090501Reply Comments.pdfesIDA~POR~
An IDACORP Company
LISA D. NORDSTROM
Senior Counsel
May 1, 2009
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-08-22
RuleH
Dear Ms. Jewell:
Enclosed for filing please find an original iand seven (7) copies of Idaho Power
Company's Reply Comments in the above matter.
Also, I would appreciate it if you would return a stamped copy of this letter for Idaho
Power's file in the enclosed stamped, self-addressed envelope.
Very truly yours,~:vl)1~
Lisa D. Nordstrom
LDN:csb
Enclosures
P.O. Box 70 (B3707)
1221 W. Idaho St.
Boise, ID 83702
LISA D. NORDSTROM, ISB No. 5733
BARTON L. KLINE, ISB No. 1526
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Tel: 208-388-5825
Fax: 208-338-6936
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Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-08-22
AUTHORITY TO MODIFY ITS RULE H )
TARIFF RELATED TO NEW SERVICE ) IDAHO POWER COMPANY'S
ATTACHMENTS AND DISTRIBUTION ) REPLY COMMENTS
LINE INSTALLATIONS OR ALTERATIONS )
)
COMES NOW, Idaho Power Company ("Idaho Power" or "the Company"), and in
response to Comments filed in this docket, submits the following Reply Comments.
I. ALLOWANCES
The Company's proposal to provide allowances equal to the installed costs of
"standard" overhead terminal facilities is intended to provide a fixed credit toward
terminal facilities and/or line installations for customers requesting service under Rule
H. The fixed allowance of $1,780 for single phase service and $3,803 for three phase
service is based on the cost of the most commonly installed facilities and attempts to
mitigate intra-class and cross-class subsidies by requiring customers with greater
IDAHO POWER COMPANY'S REPLY COMMENTS - 1
facilities requirements to pay a larger portion of the cost to serve them. The Company's
approach and ultimate recommendation for determining allowances was intended
primarily to achieve the goal of reducing upward pressure on rates. The cost/economic
analyses conducted by the Commission Staff and the Building Contractors Association
of Southwestern Idaho ("Building Contractors") wil not have the same effect.
By providing allowances equal to the "standard" and most common services
installed (see Scott Sparks' filed workpapers pages 12-13, included as Attachment No.
1, and the Company's Responses to Requests Nos. 23 and 24 of the Commission
Staffs First Production Request, included as Attachment No.2), the Company can help
ensure that the additional costs associated with larger "non-standard" services are
recovered from those customers requesting the services rather than spreading those
additional costs to all ratepayers. Specifically, Idaho Power calculated and
recommended allowances that were impartial to customer classes and minimized
subsidization of terminal facilities costs. Under the Company's proposal, the
quantification of standard terminal facilities costs would be updated annually.
Attachment No. 3 summarizes the positions of the parties as presented in Comments
filed with the Commission in regard to major issues like allowances.
The Company is not entirely opposed to Staffs recommendations for allowances;
however, it does have a few concerns. First, if the Company was to pay an allowance
equal to overhead terminal facilities on larger service installations, it is possible that the
allowance could be inflated by the lack of equipment sizing equivalents. For instance, if
a 750 kVa underground padmount transformer is required for a new service, the
Company would calculate an allowance based on a similar overhead installation.
IDAHO POWER COMPANY'S REPLY COMMENTS - 2
Because there are no 750 kVa overhead transformer equivalents, the allowance would
be calculated based on an installation of three overhead transformers totaling 1,000
kVa. This clearly results in an inflated allowance resulting from equipment sizing
differences in underground and overhead transformers.
Second, Staff does not address Schedule 1 Non-residence and Multiple
Occupancy. If the Commission was to accept Staffs recommendation for Schedule 1,
the Company would propose keeping the existing allowance of providing a meter only
for Schedule 1 Non-residential, providing a $1,780 allowance for single phase
transformers installed in multiple occupancy projects and a $3,803 allowance for three
phase transformers installed in multiple occupancy projects.
Third, the Company wishes to clarify Staffs Attachment 8. Under the column
Staffs Proposal, "Terminal Facilities" allowances for Schedules 1, 7, 9, and 24 should
be identified as "Overhead Terminal Facilities." Additionally, Staff identifies an existing
allowance of 80 percent of terminal facilities for Schedule 24 three phase services. The
correct existing allowance is to provide overhead terminal facilities. Idaho Power
Attachment No. 4 revises Staffs Attachment 8 to identify in underline the clarifications
described above.
The Company does not agree with the Building Contractors' recommendation
that all terminal facilities (overhead and underground) be provided and included in rate
base. As proposed by both Idaho Power and the Commission Staff, Company-funded
allowances provided inside subdivisions would be determined based on the costs
associated with the installation of overhead terminal facilities -- whether a fixed amount
as proposed by Idaho Power or a variable amount as proposed by Staff. The only
IDAHO POWER COMPANY'S REPLY COMMENTS - 3
difference is that under Idaho Power's proposal, the allowance would be credited on the
subdivision's original work order and under Staffs proposal, the allowance would
become refundable to the payee of the original work order as customers connected for
permanent service.
For reasons stated above, the Company does not entirely agree with the Idaho
Irrigation Pumpers Association's ("IIPA") claim that "the proposed Rule H changes do
not in any way address the incremental costs of growth as it applies to associated
Transmission and Generation costs." As pointed out on page 5 of Mr. Said's testimony,
although "there are no requirements for contributions in aid of construction for new
transmission and generation. . .. (R)educing the Company's new customer-related
distribution rate base by reducing allowances and refunds wil relieve one area of
upward pressure on rates and wil take a step toward growth paying for itself." The
Company also disagrees with IIPA's assertion that the proposed single phase and three
phase allowances represent a "Minimum Service Design" rather than a standard design.
Pages 12-13 of Scott Sparks' workpapers filed with the Application and the Company's
Responses to Requests Nos. 23 and 24 to the Commission Staffs First Production
Request (Attachments Nos. 1 and 2, respectively) provide an itemized list of all
materials and labor the Company used in determining standard overhead terminal
facilities for single phase and three phase services. Idaho Power recognizes the IIPA's
concern for proposed allowances associated with large three phase installations;
however, it is not the Company's intent to fund all terminal facilities costs for these non-
standard service installations.
IDAHO POWER COMPANY'S REPLY COMMENTS - 4
II. SUBDIVISION LOT REFUNDS
The Company stands by its proposal to discontinue subdivision lot refunds in an
effort to shift a greater portion of the cost for facilities installed inside subdivisions from
the general rate base to those customers requesting new facilities. As explained in the
Company's response to Staffs First Production Request No. 22, included as
Attachment No.5, "if refunds are eliminated, the Company's rate base no longer grows
by refunded amounts." This is consistent with the Company's stated objectives outlined
in its Application. The Company is not opposed to Staffs recommendation that
transformer costs inside subdivisions be refunded to the subdivider/developer as new
homes connect for permanent service.
On page 28 of his testimony, Mr. Slaughter recommends that the Commission
increase the per-lot-refund for line extensions to $1000. Mr. Slaughter points to the
information presented on his Exhibit No. 204 as the basis for his proposed $1000 lot
refund amount. Exhibit No. 204 contains a listing of the Company's distribution rate
base by customer class as it was presented in Idaho Power's 2008 general rate case,
Case No. IPC-E-08-10. As can be seen on Exhibit No. 204, the total distribution rate
base per residential customer is $1002, or approximately the $1000 proposed by Mr.
Slaughter. Exhibit No. 204 also shows that the Company's investment in distribution
substations, primary lines and transformers, secondary lines and transformers, services,
and meters is included in the $1002 number.
The purpose of the lot refund has been to reimburse a portion of the line
extension costs that developers are required to pay in advance of construction. These
refunds are provided as customers begin taking permanent service from Idaho Power.
IDAHO POWER COMPANY'S REPLY COMMENTS - 5
For residential installations inside subdivisions, the line extension costs represent
investment in primary and secondary lines but do not include costs associated with
distribution substations, terminal facilities, or meters. Mr. Slaughter includes the costs
of distribution substations, terminal facilities, and meters in his calculation; this is
incorrect and creates an appearance of inflated developer investment. With these facts
in mind, it is clear that Mr. Slaughter's method for developing his lot refund
recommendation is flawed. Therefore, because the true cost basis for lot refunds does
not align with Mr. Slaughter's recommendation, the Company does not agree that lot
refunds for line extensions should be raised to $1,000 per lot.
It has been pointed out in individual letters sent to the Commission and in the
Comments/testimony provided by the Building Contractors that increases in housing
prices have a direct impact on the number of buyers eligible to make home purchases.
The Company does not dispute this generalization; however, it does dispute the
implication that updating the charges and credits in this filing wil have a direct impact on
housing prices. It is well known that the costs associated with home construction are
diverse and well beyond the costs associated with electrical service alone. When taking
into account all costs (engineering, planning, permitting, grading, materials, labor,
utilities, etc.) associated with new home construction inside and outside of subdivisions,
the Company does not believe there is a one-for-one relationship between charges and
credits under Rule H and the price of homes. Ultimately, the market sets housing prices
-- not home builders, suppliers, utilities or developers. Builders and developers have
the opportunity to adjust their construction practices to meet current demand by
assessing all related construction costs, including, but not limited to, supplier and
IDAHO POWER COMPANY'S REPLY COMMENTS - 6
subcontractor contracts, general overheads, profit margins, and the number and type of
homes they choose to build. This is evidenced by the fact that home prices have varied
dramatically, both increasing and decreasing in value, since Idaho Power Company last
made major revisions to Rule H in 1997.
II. UNDERGROUND SERVICE
The Company does not support Staffs recommendation that underground
service should be provided at no cost for Schedule 1 and Schedule 7 if the customer
supplies the trench, backfll, conduit, and compaction. Instead, the updated
underground service attachment charges proposed in Rule H Section 4.b. should apply
when underground service is requested. It is important to note these charges account
for costs associated with overhead services and they only reflect the incremental costs
of providing underground service as opposed to overhead (see Attachment No.6, the
Company's Responses to Requests Nos. 9 and 10 of the Commission Staffs First
Production Request). If the Commission determines that underground service should
be provided at no additional charge, then the Company recommends a maximum
distance limitation of 100 feet of 1/0 service cable and a maximum sized service panel
of no more than 200 amperages. Services requiring more than 100 feet of service cable
would be subject to the charges listed under Rule H Section 4.b.
IV. WORK ORDER COST METHOD AND CONTROLS
Staffs Comments and ultimate recommendation concerning Idaho Power's work
order cost method and controls were based on a review of a confidential internal
memorandum specifically designed to identify outliers -- not the overall disparity
between work order estimates and actual costs. The report was originally prepared to
IDAHO POWER COMPANY'S REPLY COMMENTS - 7
satisfy Sarbannes-Oxley requirements to "review a selection of contributions in aid of
construction work orders where actual costs were greater than or less than estimated
costs to ensure that the original estimate charged to the customer reasonably
represents costs of services provided." Each identified outlier had a logical explanation
for a variance and the report summary clearly states in bold that "the results of the
review found that all of the work order estimates were reasonable." The Company
believes that its current internal audit process of reviewing work order cost estimates
not only satisfies Sarbannes-Oxley requirements but ensures that a reasonable amount
of contributions in aid of construction are collected.
v. GENERAL OVERHEAD RATE
General overheads are costs that are incurred in direct support of the Company's
construction process, but would be very diffcult to directly associate to a particular
construction job. These costs are accumulated and allocated back to construction jobs
based on a cost allocation methodology. It is Idaho Power Company's policy, per 18
CFR Part 101 Electric Plant Instructions (4) (2007), to apply overheads to construction
work orders.
18 CFR Part 101 Electric Plant Instructions (4)(2007) allows the pay and
expenses of the general offcers, administrative workers, engineering supervisors, and
other engineering services applicable to construction work to be charged to
construction. As a result, some of the construction related-employees that support Rule
H projects charge a portion of their wages and other expenses to general overheads
(FERC account 107). Like all other plant additions, all overhead charges are initially
charged to FERC account 107, Construction Work in Progress, and then subsequently
IDAHO POWER COMPANY'S REPLY COMMENTS - 8
moved to FERC account 101, Electric Plant in Service, when the work order they have
been applied to is completed. Overhead charges are applied to the work order monthly
as a percentage of actual charges to the work order.
Staff alleges in its Comments that an adjustment to the overhead rate charged
under Rule H outside of a general rate case, as proposed by the Company, would result
in a double collection of costs. That is, Staff claims that increasing the overhead rate
charged under Rule H to 15 percent prior to the next general rate case proceeding
would result in the collection of the difference between the current overhead rate of 1.5
percent and the proposed 15 percent rate (13.5 percent) in both general rates and again
from those requesting line extensions under Rule H.
The Company does not agree with Staffs assessment of double counting.
Because overhead costs do not become additions to electric plant in service until the
work order they have been applied to is completed, any future overhead costs would not
be included in electric plant in service and therefore in rates until the next general rate
case. As described earlier, all overhead charges are ultimately charged to FERC
account 101, Electric Plant in Service, when the work order they have been applied to is
completed. Any incremental plant additions that occurred or wil occur beyond the 2008
test year are not included in current rates. Correspondingly, any incremental overhead
costs charged to FERC account 101 beyond the 2008 test year would not be included in
current rates. From a ratemaking perspective, the Company's proposal to increase the
current overhead rate charged under Rule H will simply reduce the level of overhead
costs that would otherwise be included in rate base as part of a future general rate
case.
IDAHO POWER COMPANY'S REPLY COMMENTS - 9
Vi. VESTED INTEREST PERIOD
The Company proposes to reduce the vested interest period from five years to
four years based on a supportive internal report. Idaho Power does not oppose Staffs
recommendation to keep the vested interested period at five years. The Company
opposes the Building Contractors' recommendation that the vested interest period be
increased to ten years.
VII. CHANGES TO DEFINITIONS
The Company does not oppose Staffs recommendation to modify the definition
of "Unusual Conditions"; however, it does recommend adding language to the last
sentence of Staffs proposal. The last sentence would read: "Cost associated with
unusual conditions are separately stated and are subject to refund if not encountered."
In addition, Staff proposed that a section be added to Subsection 6.h. to specif
that "if unusual conditions are not encountered, the Company wil issue the appropriate
refund within 30 days of completion of the project." The Company appreciates Staffs
concern for specifying a time limit for unusual conditions refunds; however, the
Company is limited in its flexibility to refund due to existing contracts signed with
subcontractors of the Company. Currently, construction contracts with subcontractors
of Idaho Power Company specify that subcontractors must invoice the Company for
work completed within 60 days of project completion. Because of this stipulation, the
Company cannot commit to issuing refunds 30 days after completion of projects for
unusual conditions not encountered. Nevertheless, the Company agrees with Staff that
refunds for unusual conditions not encountered should be made in a timely manner and
wil work to narrow the time frame for subcontractor invoicing in future contract
IDAHO POWER COMPANY'S REPLY COMMENTS -10
negotiations. The Company recommends a 90-day refund period for unusual conditions
not encountered while it works to negotiate new contracts with subcontractors.
VII. RELOCATIONS IN PUBLIC ROAD RIGHTS-OF-WAY
A. Background
For at least 30 years, Idaho Power's Rule H and its predecessor rules have
required that parties who request the relocation of Company utility facilities are
obligated to pay for the costs of the relocations. This policy ensures that the costs of
relocations are borne by the parties benefitting from the requests and not by all of the
Company's customers through higher electric rates. In this case, the Company has
proposed a new Section 10 to Rule H, which specifically addresses the situation where
Company facilities are located in public road rights-of-way. Ada County Highway
District ("ACHD"), Association of Canyon County Highway Districts ("ACCHD"), and the
City of Nampa ("Nampa") all submitted substantially similar Comments urging the
Commission to reject the Company's proposed Section 10 because it would usurp the
authority of public road agencies to govern the public use and the safety of public
highways. For purposes of these Reply Comments and the proposed Section 10, a
"public road agency" is .any state or local agency, county, or municipality that
administers the public road rights-of-way and is requesting Idaho Power to relocate
utilty facilities.
Idaho Power respectfully submits that ACHD, Nampa, and ACCHD (hereinafter
collectively referred to as "the Agencies") misunderstand (1) what the Company is
requesting, (2) the scope of the Commission's authority to regulate utility rates and
operations, and (3) how the Commission's jurisdiction encompasses the allocation of
IDAHO POWER COMPANY'S REPLY COMMENTS -11
costs arising out of relocation of utility facilities, including relocation in public road rights-
of-way. This misunderstanding is clearly ilustrated in the comments of ACCHD. "The
IPUC does not have authority to approve Idaho Power's proposed Rule H-Section 10.
The proposed terms would place the IPUC in the position of having to determine what
does or does not constitute a general public benefit versus a third-part benefit versus a
shared benefit. This determination it (sic) outside the expertise and role of the IPUC."
(Emphasis added.) (Comments ACCHD, p. 3.) Both the Commission and the Agencies
are charged with performing their statutory duties consistent with the public interest.
The public that ACHD and ACCHD serve are the users of the roads and highways
within the particular geographic locale encompassed by the districts' boundaries. In the
case of the City of Nampa, the public is the citizens of the City.
For the Idaho Public Utilities Commission, the public interest extends beyond a
specific local geographic area. The public interest that the Commission must protect
covers every citizen of the state of Idaho receiving utility service from regulated public
utilities.
It is the Agencies' position that they have sole and complete jurisdiction to
determine when relocation is required to avoid "incommoding the public." Idaho Power
agrees. However, the Agencies go one step further and contend that their authority to
require relocation also gives them the sole discretion to decide if the utility wil receive
any reimbursement from third parties benefitting from the road improvement and
relocation. It is this second step that Idaho Power disputes. It is Idaho Power's
contention that the Commission also has an obligation to protect the public interest and
when it comes to allocating the costs of utility facility relocations to determine utility
IDAHO POWER COMPANY'S REPLY COMMENTS - 12
rates and charges, the Commission has exclusive jurisdiction. Fortunately, there is a
win-win resolution to this disagreement. Idaho Power's proposed Section 10 of Rule H
allows the Commission to exercise its jurisdiction concurrently with the Agencies in a
way that does not contravene, in any way, the important role the Agencies play in
constructing, operating, and maintaining the streets and highways within their
jurisdiction.
Attachment No. 7 is a flowchart that graphically depicts how the Company's
proposed Section 10 accommodates these concurrent jurisdictions and protects all of
the public, both local and state wide.
B. Summary of Proposed Section 10 of Rule H
The vast majority of Idaho Power's distribution facilities are located on public
roads rights-of-way. Transmission facilities, because of their large size and for safety
and operating reasons, are generally located on private rights-of-way or on public land
where the Company obtains long-term permits for the location of transmission facilities.
The desirability of utilizing public road rights-of-way to locate electrical
distribution facilities was recognized early in Idaho's history. In 1903, the Legislature
established Idaho Code § 62-705, which granted electric utilities the right to utilize all
public roads, streets, and highways for electric facilities so long as that usage did not
"incommode the public use of the road, highway, street. . . ." (Idaho Code § 62-705.)
Idaho Power's proposed Section 10 does not have any impact on the authority of
public road agencies to manage and control their rights-of-way. More specifically,
Section 10 has no impact on the public road agencies' right to require utilities to relocate
their facilities from the road rights-of-way, at no cost to the public road agency, where
IDAHO POWER COMPANY'S REPLY COMMENTS -13
the facilities incommode the public use. Instead, Section 10 addresses the entirely
separate issue of whether the utility relocation costs should be borne by the utility (and
all of its customers) or by a third part who directly benefits from the relocation. This
determination involves the Company and the third part and has no impact on the public
road agencies' jurisdiction over its rights-of-way.
Section 10 provides a simple, time-tested standard for determining whether the
Company or a third part should pay for utility relocations caused by road
improvements. The basic rule is that the third party should pay the same percentage of
the utility relocation costs as it pays for the underlying road improvement costs. In
summary, the proposed Section 10 rules provide:
1. If the public road agency determines that it wil use 100 percent of
its own funds for the road improvements that necessitate the utility relocation, then
Idaho Power would pay 100 percent of the utility relocation costs it incurs.
2. If the public road agency determines that 100 percent of the cost of
a road widening or other improvement should be funded by payments from a part other
than the public road agency, "a third-part," then it wil be presumed that the highway
project is being performed to exclusively benefit the third part making the contribution.
In that instance, utilty relocation costs would be borne 100 percent by the third part.
3. If the public road agency determines a highway improvement
should be funded partially by using the public road agency's own funds and partially by
a contribution from a third part or parties, then the utility would collect the same
percentage of relocation costs from the third part. For example, if the public road
agency was funding 50 percent of the cost of a right-of-way improvement from its own
IDAHO POWER COMPANY'S REPLY COMMENTS - 14
funds and a third-part was paying an impact fee or otherwise funding the other 50
percent of the cost of the right-of-way improvement, the utility would collect 50 percent
of its relocation expense from the third part and the balance would be recovered in the
Company's electric rates.
The cost-sharing arrangement proposed in Section 10 is simple, straightforward,
and allows the public road agency, in the initial instance, to decide to what degree road
improvement work and resulting utility relocation work are for a public purpose or for the
specific benefit of a third part.
C. Agencies Misunderstand the Scope of the Commission's Jurisdiction
The Agencies correctly note in their Comments that the jurisdiction of the IPUC is
limited to that expressly granted by the Legislature. Washington Water Power
Company v. Kootenai Environmental Allance, 99 Idaho 875, 591 P.2d 122 (1979).
Idaho Power agrees. However, it cannot be seriously argued (and the Agencies do not
so argue) that the Commission does not have the authority to regulate how utilities wil
recover the costs of relocating their facilities in their rates and charges. This authority
includes the authority to require the beneficiaries of a relocation of utility facilities to
contribute the cost of that relocation. Such contributions affect rates because if the
utility receives such a contribution, it does not have to include those costs in its rates,
thereby reducing upward pressure on rates. In spite of this long-standing principal of
cost-causation ratemaking, the Agencies argue that in this one situation the Legislature
has divested the Commission of its authority to determine how utilities wil recover the
cost of relocating utility facilities in their rates. The Agencies argue that in this one
instance, the Legislature intended that the regulation of how utilities recover the costs of
IDAHO POWER COMPANY'S REPLY COMMENTS - 15
relocating their facilities should be handed over to the dozens of state and local public
road agencies.
Idaho Power does not believe any intent to limit the Commission's jurisdiction to
regulate utility cost recovery is manifested in any of the cases or statutes cited by the
Agencies. Instead, Idaho Power contends that this Commission has been given
exclusive jurisdiction to determine utility rates and charges arising out of the cost of
relocation of utility facilties. The Company's position is supported in both the Idaho
statutes and case law.
Idaho Code § 61-502 provides:
DETERMINATION OF RATES. Whenever the commission,
after a hearing had upon its own motion or upon complaint,
shall find that the rates, fares, tolls, rentals, charges or
classifications, or any of them, demanded, observed,
charged or collected by any public utility for any service or
product or commodity, or in connection therewith, including
the rates or fares for excursions or commutation tickets, or
that the rules, regulations, practices, or contracts or any
of them, affecting such rates, fares, tolls, rentals, charges
or classifications, or any of them, are unjust, unreasonable,
discriminatory or preferential, or in any wise in violation of
any provision of law, or that such rates, fares, tolls, rentals,
charges or classifications are insufficient, the commission
shall determine the just, reasonable or suffcient rates,
fares, tolls, rentals, charges, classifications, rules,
regulations, practices or contracts to be thereafter
observed and in force and shall fix the same by order as
hereinafter provided, and shall, under such rules and
regulations as the commission may prescribe, fix the
reasonable maximum rates to be charged for water by any
public utility coming within the provisions of this act relating
to the sale of water. (Emphasis added.)
This section of the Idaho Code makes it clear that the Legislature has granted
the Commission broad authority to regulate the practices and contracts of utilities as
they affect rates. It also makes it clear that the Commission has the authority to
IDAHO POWER COMPANY'S REPLY COMMENTS - 16
determine just and reasonable utility practices and contracts and to issue orders
addressing those practices.
Idaho Code § 61-503 provides:
POWER TO INVESTIGATE AND FIX RATES AND
REGULATIONS. The commission shall have power, upon a
hearing, had upon its own motion or upon complaint, to
investigate a single rate, fare, toll, rental, charge,
classification, rule, regulation, contract or practice, or any
number thereof, or the entire schedule or schedules of rates,
fares, tolls, rentals, charges, classifications, rules,
regulations, contracts or practices, or any thereof, of any
public utility, and to establish new rates, fares, tolls, rentals,
charges, classifications, rules, regulations, contracts or
practices or schedule or schedules in lieu thereof.
Idaho Code § 61-301 provides:
CHARGES JUST AND REASONABLE. All charges made,
demanded or received by any public utilty, or by any two
(2) or more public utilities, for any product or commodity
furnished or to be furnished or any service rendered or to be
rendered shall be just and reasonable. Every unjust or
unreasonable charge made, demanded or received for such
product or commodity or service is hereby prohibited and
declared unlawfuL. (Emphasis added.)
The Agencies' Comments raise the specter that approval of Section 10 by the
Commission might be in conflict with the Idaho Constitution. Idaho Power disagrees. In
the case of Grindstone Butte Mutual Canal Company, Etc., v. Idaho Public Utilties
Commission, 102 Idaho 175, 627 P.2d 804 (1981), the Idaho Supreme Court analyzed
the constitutional and statutory limitations placed on the Commission. The Court said:
Appellants contend that the Commission acted outside its
constitutional and statutory limitations by giving
consideration to the concepts of conservation, optimum use
and resource allocation. We do not agree. While the Idaho
Public Utilities Commission is a body with statutorily defined
jurisdiction, it is also true that the Commission operates in
the public interest to insure that every public utility operates
IDAHO POWER COMPANY'S REPLY COMMENTS -17
as shall promote the safety, health, comfort of the public and
as shall be in all respects adequate, efficient, just and
reasonable. i.C. §§ 61-301 & 61-302. The power to fix rates
is for the public welfare. Agricultural Products v. Utah Power
& Light Co., supra. The Commission has the authority to
investigate and determine whether a rate is unjust,
unreasonable, discriminatory or preferential, or in any wise in
violation of any provision of law. i.C. §§ 61-502 & 61-503.
'Every power expressly granted, or fairly to be implied from
the language used, where necessary to enable the
Commission to exercise the powers expressly granted
should be afforded.' Washington Water Power Co. v.
Kootenai Environmental Allance, 99 Idaho 875, 879 591
P.2d 122, 126 (1979). Citing United States v. Utah Power &
Light Co., 98 Idaho 665, 667, 570 P.2d 1353, 1355 (1977),
quoting 64 Am. Jur.2d, Public Utilities, §232 (1972).
The relief requested by Section 10 of Idaho Power's proposed Rule H falls
squarely within the Commission's grant of authority as described in the above-cited
cases and statutes. The Commission is charged with ensuring that costs of utility
facility relocation have not been unreasonably charged to Idaho Power customers
when, in fact, the relocation of utility facilities wholly or partially benefits a person or
entity other than the public. If costs are being unreasonably allocated, the Commission
has the authority to provide a remedy.
D. Agencies Misunderstand What Idaho Power is Requesting
The Agencies direct the bulk of their comments to pointing out the exclusive
jurisdiction the Agencies possess to manage public highways and public rights-of-way
within the Agencies' respective geographic boundaries. They characterize the
proposed Section 10 of the Company's proposed Rule H as an encroachment on the
Agencies' authority to exercise its ongoing responsibilities for constructing, operating,
and maintaining road systems. The Comments of Nampa sum up the position of the
Agencies very succinctly. "Nampa advises the IPUC to delete the proposed Section 10
IDAHO POWER COMPANY'S REPLY COMMENTS -18
and any other parts of the proposed Rule H that attempt to regulate the relocation of
utilities on municipal land. Such relocation regulation is outside the jurisdiction of the
IPUC." (Comments of City of Nampa, p. 4.) Nampa casts its net too widely. The
Commission has always had the authority to regulate relocation of utilities on utility-
owned rights-of-way located on municipal propert. For example, if Nampa wanted to
construct an addition to its City Hall and to do so needed Idaho Power to relocate its
utility facilities off of an Idaho Power easement, Idaho Power would request that the City
pay the relocation costs in accordance with Rule H. Idaho Power's authority to request
those costs be paid by Nampa and the Commission's authority to require Nampa to pay
those costs has always been part and parcel of Rule H. Idaho Power does not believe
that the City is disputing that fact.
The Agencies cite Vilage of Lapwai v. Allgier, 78 Idaho 124, 129,229 P.2d 475,
478 (1956) as support for their position. Lapwai confirms that municipalities, through
franchise agreements with utilities, exercise authority within their municipal boundaries
to allow or disallow a utility to locate facilities in their streets and alleys. Lapwai
confirms that when a franchise agreement expires, a city is not required to procure the
consent of the Commission as a condition of requiring removal of utility facilities from
the cities, streets, and alleys. Lapwai, however, does not address the central question
presented here, that is a utility's ability to obtain compensation from private parties that
receive a benefit when a city requires the relocation of utilty facilities within the public
right-of-way when that utility has a valid franchise to operate in that city.
The Agencies also cite Rich v. Idaho Power Company, 81 Idaho 487, 346 P.2d
596 (1959) in support of their position. Again, Rich does not speak to the issue
IDAHO POWER COMPANY'S REPLY COMMENTS - 19
presented by Section 10 of Rule H. In the Rich case, the Idaho Board of Highway
Directors had sought a declaratory judgment to determine the constitutionality of a
statute passed by the Idaho Legislature in 1957 providing that utilities would be
reimbursed out of dedicated state highway funds for the cost of relocating their utility
facilities located on any federal-aid primary or secondary system or on the inter-state
system of Idaho public highways, when determined necessary by the Idaho Board of
Highway Directors. While Rich upheld the common law rule that utilities locating
facilities in public rights-of-way can be required to relocate their facilities at their own
expense if the safety of the public required it, the principal issue addressed in Rich was
the source of funding for the utility's cost of relocation. In Rich, the court decided that
the recently passed statute requiring utility relocation costs be reimbursed to the utility
out of the dedicated state highway fund violated the Idaho Constitution's prohibition on
the lending of state credit. No such issue exists here. Under Idaho Power's proposed
Section 10, public highway funds are never used to reimburse Idaho Power for
relocation expense. To the extent it is applicable to this case, Rich is essentially a
restatement of this common rule law. Idaho Power is not seeking to contravene the
common law rule that its use of the public road right-of-way is subordinate to the
paramount use of public road right-of-way if that use interferes with the public benefit.
Idaho Power's proposed Section 10 does not require any of the Agencies to reimburse
the Company for relocation costs where relocation is required to benefit the public. It is
only in those cases where the road widening or improvement benefits a third part that
the Company believes the Idaho Commission should play a role. The Commission
IDAHO POWER COMPANY'S REPLY COMMENTS - 20
should approve rules that require such third part to reimburse Idaho Power so that the
costs of the relocation are not unfairly shifted to the Company's customers.
E. The Commission Is Well Suited to Resolve Disputes Arising Under
Section 10
The Comments of the Agencies point out a number of problems they perceive
with the definition and treatment of third-part beneficiaries under Section 10. Idaho
Power's proposed Section 10 addresses the real-life situation where highway
improvements and the concurrent requirement to relocate utility facilities is driven by
real estate development adjacent to streets and highways. In response to that situation,
the ACCHD states, "The notion seems to be that some improvements are made for the
general public and other improvements are made only for the benefit of an identifiable
third-part." (Comments of ACCHD, p. 4.) That notion is exactly correct and gets to the
heart of the problem that arises when potential economic development within the
jurisdiction of an agency colors how the agency views the public interest in association
with allocation of the costs of relocating utility facilities. Idaho Powets proposed Rule H
sets forth an easy way to parse the respective public benefits of a particular highway
improvement project. If the public road agency is wiling to utilize its own funds to
perform highway improvement, then it is highly probable that the public interest drives
the need for the improvement. However, when the public road agency obtains a
contribution from a third part to reduce the cost of a highway improvement, it is strong
evidence that all or a portion of the highway improvement wil confer a benefit on an
identifiable third party and is not totally for the benefit of the public.
The Agencies' Comments reflect a concern that Section 10 does not specifically
define what constitutes a third-part beneficiary. In its Comments, ACCHD states,
IDAHO POWER COMPANY'S REPLY COMMENTS - 21
"Section 10 does not clearly define what constitutes a third-part beneficiary, providing
only examples: 'private or public third-parties such as real estate developers, local
improvement districts, or adjacent land owners.' This definition is problematic and
overly broad." (ACCHD comments, p. 4.) First, the Agencies are apparently unfamiliar
with the Commission's quasi-judicial role and its considerable experience in fact-finding
and resolving disputes. Applying the facts of an individual case to broad policy and
legal definitions is precisely what the Commission does all the time. There is no
question that the Commission is fully capable of analyzing and resolving individual fact
situations arising out of the definitions contained in Section 10. With respect to the
Agencies' concern that a third part might be a public agency, Idaho Power is confident
that if questions arise, the Commission wil be able to assess the respective impacts
and benefits as between multiple public agencies and private entities and determine an
appropriate allocation of costs between public bodies, private entities, and other utility
customers.
F. Other Alternative Forums for Resolving Disputes Are Not Practical
Under the Agencies view of the law, the only alternative available to Idaho Power
for resolving disputes arising out of an unreasonable assessment of relocation costs is
for the Company to file declaratory judgment actions in district court each time it
perceived that a public road agency had unreasonably assigned relocation costs to the
utility. Such an approach would be expensive, time consuming, and, frankly,
impracticaL.
While Idaho Power believes that its proposed Section 10 of Rule H provides a
simple, efficient way of determining whether all or a portion of relocation costs should be
IDAHO POWER COMPANY'S REPLY COMMENTS - 22
paid by utility customers or by a third part, the Company also believes there must be a
neutral forum that can effciently resolve disputes. Idaho Power contends that the
Commission is uniquely positioned to provide that dispute resolution process.
The Agencies propose that the best way for Idaho Power to address relocation
cost issues is to negotiate contracts with highway districts and revise its franchise
agreements with municipalities. It should be noted that most, if not all, of Idaho Powets
franchise agreements with individual municipalities already contain the following
language: "The Grantee shall bear the cost of relocating its facilities at the city's
request, unless the facilities are to be relocated for the benefit for third part, in which
case the third part shall the pay the costs of relocation." However, problems may arise
if a city determines, perhaps for economic development reasons, that a particular street
improvement project wil be characterized as a city project, thereby relieving a real
estate developer of the cost of reimbursing the utilty for relocation costs. (See the
testimony of Idaho Power Witness David Lowry.)
In the case of non-municipal highway agencies, the Company is willng to work
with these agencies to voluntarily develop workable solutions. ACHD correctly points
out in its Comments that Idaho Power's proposed Section 10 is very similar to ACHD's
Resolution 330. Resolution 330 has generally worked well in assigning relocation costs.
The principal problem with the approach of negotiating individual resolutions,
ordinances, contracts, and franchise agreements is that Idaho Power operates in
dozens of individual highway jurisdictions. If Section 10 provides an over-arching rule,
voluntary, individual agreements wil be much easier to develop.
IDAHO POWER COMPANY'S REPLY COMMENTS - 23
However, even with voluntary agreements, when a question arises concerning
the equity of an allocation as determined by a public road agency, Idaho Power believes
there needs to be a forum, at the Idaho Public Utilities Commission, to which such
disputes can be presented for resolution. Idaho Power's Exhibit NO.1 in this case, the
communications between the City of Nampa and Idaho Power regarding the City's
unwillngness to assess costs of relocation to a local improvement district along Nampa-
Caldwell Boulevard, is a good example of a situation where a neutral third part, like the
Commission, might have concluded that a public's road agency's determination that a
relocation cost should be borne totally by the utility rather than by a third part was not
reasonable.
G. The Reference to Local Improvement Districts Needs to be Clarified
In their Comments, the Agencies all identify a drafting problem in the Company's
proposed Section 10. They point out that Rule H currently includes the definition of a
local improvement district ("LID") as being a district which provides for the funding of the
differential between the higher cost of underground facilities as compared to overhead
facilities. The Agencies urge the Commission that should it decide to include Section 10
in Rule H as proposed by Idaho Power, that references to any LID as a third-part
beneficiary be clarified and limited to the definition currently included in Rule H; i.e.,
underground/overhead differential LIDs.
Idaho Power appreciates the Agencies pointing out this potential problem area.
In Rule H, "local improvement district" is a defined term (and therefore capitalized when
used in the text of the Rule) and is limited to the type of LID considered under Idaho
Code § 50-2503-L1Ds. Proposed Section 10 of Rule H did not capitalize "LID" or "local
IDAHO POWER COMPANY'S REPLY COMMENTS - 24
improvement district" because it was the intention of the Company that in Section 10,
the term LID or local improvement district be used generically and not be limited to a
LID for funding the underground/overhead differential as defined in Rule H. It was
Idaho Power's intention that the term LID be used in its broader sense of any taxation
district. If the Commission decides to approve the inclusion of Section 10 in Idaho
Powets Rule H, the Company wil provide additional language clarifying the difference
in types of LIDs referred to in Rule H.
H. Conclusion
Idaho Power acknowledges that the Agencies have the exclusive authority to
determine that relocation of utility facilities located in public road rights-of-way is
necessary so as not to "incommode public use." (Idaho Code § 62-705.) Idaho Power
also agrees that whenever relocation of utility facilities from public road rights-of-way
are necessary to avoid incommoding the public use, the cost of relocation should not be
borne by the public road agencies. Idaho Power is only asking the Commission to
continue to exercise the jurisdiction it currently exercises to determine who pays the
cost of relocating utility facilities located in public roads when persons or entities other
than the general public receive some or all of the benefit of the relocation. Section 10
does not encroach upon the Agencies' authority to determine that relocation of utility
facilities is necessary. However, the question of who pays for the cost of relocating
utility facilities directly bears on utility rates and charges and, as a result, falls squarely
within the jurisdiction of the Commission.
IDAHO POWER COMPANY'S REPLY COMMENTS - 25
ix. RESPONSE TO ISSUES RAISED BY THE BUILDING CONTRACTORS
In his testimony in this case, Mr. Said references general rate cases that
occurred in 2003, 2005, 2007, and 2008. He also references single issue rate cases to
address the inclusion of gas-fired plants in 2005 and 2008. Mr. Said concludes that
these increases have been related to growth because "additional revenues generated
from the addition of new customers and load growth in general is not keeping pace with
the additional expenses created and required to provide ongoing safe and reliable
service to new and existing customers." (Said Direct, p. 5, L. 9.) The Company's loads
have been growing by approximately 50 average megawatts ("MW') per year and by
approximately 80 MW per year at the time of the system peak. Growth in generation
plant investment, transmission plant investment, and distribution plant investment are all
impacting the growth in electric rates. Attachment 1 to Staffs Comments explains the
relationship between growth and inflation in greater detaiL.
Yet, the Building Contractors state that, "in itself, however, growth does not
cause higher costs. In inflation adjusted terms, if the same facilities are provided at the
same real unit cost, then average real cost per customer wil not change." (Slaughter
Direct, p. 11, L1. 17-19.) The statement suggests that the only factor influencing electric
prices in this decade has been inflation. However, for customers of a regulated utilty,
the extent to which customers experience the effects of inflation is directly related to
growth.
As an example, suppose a car buyer purchases a new car in 2009 and does not
replace it until 2020. Inflation may drive the cost of a comparable car up during the next
eleven years, but the car buyer will not experience the impact of that inflation until
IDAHO POWER COMPANY'S REPLY COMMENTS - 26
he/she replaces the car in 2020. Similarly, an electric utility customer is insulated from
the impacts of inflation on the cost of facilities until they need to be replaced. To the
extent that some replacement of plant occurs each year, such impacts of inflation are
experienced by customers. However, as growth occurs, new plant costs in addition to
normal replacement costs add to the impact of inflation experienced by customers.
The Building Contractors want the Commission to ignore the impact that growth has on
ensuring that customers feel the full impact of inflation sooner rather than later. People
do not want their car payments to increase just because their neighbor bought a new
car. Similarly, existing customers do not want to see rate increases just because there
are new customers on the system.
Mr. Slaughter points out that dating back to the 1950s, demand growth has been
encouraged. For many years of Idaho Power Company's existence, it was in a surplus
generation and surplus transmission situation. Under those conditions, the addition of
new customer loads required no new generation costs and no new transmission costs,
only new distribution costs. As a result, the Company and the Commission could be
promotional (i.e., providing greater allowances) with regard to its line installation
provisions. Costs per customer may actually have been declining at times even with
generous allowances. Today's situation is not comparable to those times. Customers
are experiencing the full incremental impact of adding new generation and transmission
facilities to the Company's system. The Building Contractors want the Commission to
ignore the current situation and isolate distribution costs from other costs of growth
experienced by customers even though promotional provisions of the past may have
IDAHO POWER COMPANY'S REPLY COMMENTS - 27
been established in light of total costs of serving customers. Now is not the time to
continue promotional activity at the expense of existing customers.
The Building Contractors suggest that the proposed Rule H is discriminatory
against new customers. Rule H addresses the costs that must be paid by individuals
who are not currently customers of Idaho Power for the opportunity to become
customers. If the new line installation investment is solely to provide service to new
customers, the Commission is authorized by law to require that the new customers bear
the cost of that new investment. Idaho State Homebuilders v. Washington Water
Power, 107 Idaho 415, 690 P.2d 350 (1984). So long as all potential new customers
are treated in a like manner, there is no unlawful discrimination.
In general, the Building Contractors and Mr. Slaughter imply that customers are
not paying for the full value of the product they receive. In order to move toward more
appropriate pricing, he wants the Commission to continue to require that the Company
spend significant amounts of capital on distribution facilities so that customers wil
experience the impacts of inflation as it occurs. The Building Contractors are silent as
to the impacts their recommendation has on the Company's ability to replace and
upgrade service to existing customers. If Idaho Power had unlimited access to capital,
the Building Contractors' recommendation might not impact the Company's ability to
replace or upgrade existing facilities. However, Idaho Power does not have unlimited
access to capitaL. To the extent that the Company must invest in new distribution
facilities for the benefit of new customers, the Company wil have less capital available
for other capital projects. The Building Contractors, through Mr. Slaughter, argue that
new investment benefits existing customers by lowering average costs, but those
IDAHO POWER COMPANY'S REPLY COMMENTS - 28
benefits must be examined from a wider perspective and compared to the benefits that
may be derived if the limited capital resources are utilized for other purposes. Now is
the time for the Commission to reduce Company investment in new distribution facilities
in order to allow for investment in other infrastructure that is more valuable to
customers.
x. CONCLUSION
Idaho Power respectfully requests that the Commission issue an Order approving
the proposed Rule H modifications as set forth in the Application and these Reply
Comments to become effective 120 days after the Order is issued. Because of the
extended effective date, Idaho Power would like to point out that all customers, builders,
and developers affected by any and all approved Rule H modifications wil have ample
time to modify their planning and construction decisions prior to the effective date. In
addition, all Idaho Power construction work orders signed and paid in full before the
effective date wil be subject to the provisions of the existing Rule H tariff.
DATED at Boise, Idaho, this 1st day of May 2009.
IDAHO POWER COMPANY'S REPLY COMMENTS - 29
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 1st day of May 2009 I served a true and correct
copy of IDAHO POWER COMPANY'S REPLY COMMENTS upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Kristine A. Sasser
Deputy Attorney General
Idaho Public Utilties Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
Building Contractors Association of
Southwestern Idaho
Michael C. Creamer
GIVENS PURSLEY, LLP
601 West Bannock Street
P.O. Box 2720
Boise, Idaho 83701-2720
City of Nampa AND
Association of Canyon County
Highway Districts
Matthew A. Johnson
Davis F. VanderVelde
WHITE PETERSON GIGRA Y
ROSSMAN NYE & NICHOLS, P.A.
5700 East Franklin Road, Suite 200
Nampa, Idaho 83687
Kroger Co.
Michael L. Kurt
Kurt J. Boehm
BOEHM, KURTZ & LOWRY
36 East Seventh Street, Suite 1510
Cincinnati, Ohio 45202
~ Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-- Email kris.sasser((puc.idaho.gov
Hand Delivered
-lU.S. Mail
_ Overnight Mail
FAX
-. Email mcc((givenspursley.com
Hand Delivered
-lU.S. Mail
_ Overnight Mail
FAX
-. Email mjohnson((whitepeterson.com
dvandervelde((whitepeterson.com
Hand Delivered
-lU.S. Mail
_ Overnight Mail
FAX
-. Email mkurt((BKLlawfirm.com
kboehm((BKLlawfrm .com
IDAHO POWER COMPANY'S REPLY COMMENTS - 30
Kevin Higgins
Energy Strategies, LLC
Parkside Towers
215 South State Street, Suite 200
Salt Lake City, Utah 84111
Hand Delivered
-lU.S. Mail
_ Overnight Mail
FAX
-2 Email khiggins((energystrat.com
~Ætl~
Lisa D. Nordstrom
IDAHO POWER COMPANY'S REPLY COMMENTS - 31
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-22
IDAHO POWER COMPANY
ATTACHMENT NO.1
Section 7: Line Installation and Service Attachment Allowances
Allowances were calculated based on stadard overhead terminal facilities instalation costs for
single and three phase customer needing 200 amperage of connected load at their meter base.
Residential Allowances
Schedule 1,4, and 5
Single phase terminal facilities were based on:
Travel cost - 5 man line crew & ~ hour of travel time
Labor cost-Installing material
Material cost - Primar line hot clamp
Switch Arm
Switch
Transformer
Transformer Bussing
Service
Ground rod
(DHTAA)
(DBK18)
(DSCS351)
(DT25Rl)
(DYS25)
(D3P2)
(DGRO)
The transformer used was for the highest distribution voltage that Idaho Power uses so
that all allowances would be adequate for all customer needing terminal facilities only.
Attachment No. 1
Case No. IPC-E-08-22
Idaho Power Reply Comments
Page 1 of2
Page 12 of 13
Non-Residential Allowances
Schedule 7, 9, 24
Three phase terminal facilties were based on:
Travel cost - 5 man line crew & Y2 hour of travel time
Labor cost- Installng material
Material cost - Primar line hot clamp
Switch Ar
Switch
Arester
Transformer Mount
Transformer
Transformer Bussing
Service
Ground rod
(3) (DHTAA)
(1) (DAA3D)
(3) (DSCI51)
(3) (DLAR15)
(1) (DCMB)
(3) (DT15Al)
(1) (DYY151)
(1) (D4P2)
(1) (DGRO)
Attachment No. 1
Case No. IPC-E-08-22
Idaho Power Reply Comments
Page 2 of2
Page 13 of 13
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-22
IDAHO POWER COMPANY
ATTACHMENT NO.2
REQUEST NO. 23: Please provide a cost breakdown of $1,780 Standard
Terminal Facilities allowance for single phase line installations and service attachments
showing how much of that cost is the transformer, service conductor, etc.
RESPONSE TO REQUEST NO. 23: The single phase standard terminal
facilties allowance is based on three components: (1) travel time and vehicle costs for
a crew of five, (2) materials costs, and (3) labor and equipment costs. The breakdown
of this allowance is as follows:
Travel and Vehicle cost
Material Cost
Labor and Equipment
Total
$ 134.50
$1,435.39
$ 209.61
$1,779.50
The material components include:
Hot Line Clap - connect to the main line
Pole mount bracket for the switch
Switch (Non Load Break)
25 KV A Transformer
Transformer wiring and connectors
125 feet of #2 triplex service wire
Transformer ground rod
Power Meter
Total Material Cost
$ 16.78
$ 37.71
$ 89.95
$1,096.69
$ 46.80
$ 100.95
$ 22.23
$ 24.28
$1,435.39
The response to this Request was prepared under the direction of Scott Sparks,
Senior Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 31
Attachment No. 2
Case No. IPC-E-08-22
Idaho Power Reply Comments
Page 1 of2
REQUEST NO. 24: Similarly, please provide a cost breakdown of $3,803
Standard Terminal Facilities allowance for three phase installations and service
attachments showing how much of that cost is the transformer, service conductor, etc.
RESPONSE TO REQUEST NO. 24: The three phase standard terminal facilities
allowance is based on three components: (1) travel time and vehicle costs for a crew of
five, (2) materials costs, and (3) labor and equipment costs. The breakdown of this
allowance is as follows:
Travel and Vehicle cost
Material Cost
Labor and Equipment
Total
$ 269.00
$ 2,540.90
$ 993.48
$ 3,803.38
The material components include:
Hot Line Clap - connect to the main line
Wood cross arm for switch
Lighting arresters
Switch (Non Load Break)
Transformer mounting Wing
25 KV A Transformer
Transformer wiring and connectors
125 feet of #2 triplex service wire
Transformer ground rod
Power Meter
Total Material Cost
$ 50.34
$ 134.17
$ 142.65
$ 149.46
$ 233.94
$1,376.88
$ 98.76
$ 146.03
$ 22.23
$ 186.44
$2,540.90
The response to this Request was prepared under the direction of Scott Sparks,
Senior Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 32
Attachment NO.2
Case No. IPC-E-08-22
Idaho Power Reply Comments
Page 2 of2
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-22
IDAHO POWER COMPANY
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BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-22
IDAHO POWER COMPANY
ATTACHMENT NO.5
REQUEST NO. 22: If lot refunds in subdivisions are discontinued, please
explain whether Idaho Power believes it will be at risk for recovering the cost of facilities
installed in the subdivision if the subdivision does not fully build out.
RESPONSE TO REQUEST NO. 22: No. Lot refunds represent additions to rate
base at the time of the refund. If refunds are eliminated, rate base no longer grows by
refunded amounts. Instead, a customer's contribution in aid of construction remains an
offset to rate base. If lot refunds are discontinued, the Company wil not be required to
refund any portion of installation costs related to subdivision work orders. In turn,
CIACs paid up front on work orders for facilities installed within subdivisions will not be
offset by the costs of providing lot refunds.
The response to this Request was prepared under the direction of Scott Sparks,
Senior Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 30
Attachment NO.5
Case No. IPC-E-QS-22
Idaho Power Reply Comments
Page 1 of 1
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-22
IDAHO POWER COMPANY
ATTACHMENT NO.6
REQUEST NO.9: Please provide an analysis for the cost of the distance charge
(per foot) for Company installed facilities with 1/0 underground cable, 4/0 underground
cable, and 350 underground cable, and for each service:
a. How the Company determines the appropriate size of the crew for each
type of service attchment;
b. How the Company determines the amount of trp time;
c. How the Company calculated the labor cost and what is included in that
cost for each type of service attachment;
d. If applicable, please provide the cost of each required material for each
type of service attachment;
e. A breakdown of costs showing how much of that price is travel cost, labor
cost, material cost, or any other costs that contribute to the final proposed cost.
RESPONSE TO REQUEST NO.9: Idaho Powets analysis on construction
costs is based on travel time, equipment, labor, and materials. The Company
construction costs are determined by the standard construction staffng level, the
equipment that is required to complete the work, the time it takes to safely finish a
project, and the travel time to the construction destination. Currently, Idaho Power uses
a computer softare system called "Asset Suite" to track material expenses and
determine construction costs.
a. The crew size for an underground service is a 2 person crew, determined
by the Company's standard construction staffng leveL.
b. Travel time is based on average travel time, which is 0.5 hours. In urban
areas, traffic constraints may cause delays greater than 0.5 hours, and in rural areas,
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY -14 Attachment NO.6
Case No. IPC-E-08-22
Idaho Power Reply Comments
Page 1 of4
remote location may require travel time greater than 0.5 hours, but, on average, travel
time to jobs is approximately 0.5 hours.
c. Labor cost is a combination of travel time and "wrench time." Wrench time
includes time spent doing the work and vehicles used. Wrench time has been
calculated using time and motion studies that have been integrated into the work order
construction and inventory system.
d. Underground service cable charges are for material only, based on 100
feet, and are as follows:
e.1/0 service includes:
4/0 service includes:
350 service includes:
1/0 Wire
4/0 Wire
350 Wire
Travel and vehicles
Materials
Labor & Equipment
Overhead Service Differential
Total
Travel and vehicles
Materials
Labor & Equipment
Overhead Service Differential
Total
Travel and vehicles
Materials
Labor & Equipment
Overhead Service Differential
Total
$173.26
$229.91
$415.70
$134.50
$173.26
$568.37
oe$155.00::
$721.13
$134.50
$229.91
$569.65
oe$155.00::
$799.06
$134.50
$415.70
$603.95
oe$155.00::
$999.15
The response to this Request was prepared under the direction of Scott Sparks,
Senior Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 15
Attachment NO.6
Case No. IPC-E-08-22
Idaho Power Reply Comments
Page 2 of4
REQUEST NO. 10: Please provide an analysis for the cost of the distance
charge (per foot) for customer provided trench and conduit with 1/0 underground cable,
4/0 underground cable, and 350 underground cable, and for each service:
a. How the Company determines the appropriate size of the crew for each
type of service attchment;
b. How the Company determines the amount of trip time;
c. How the Company calculated the labor cost and what is included in that
cost for each type of service attachment;
d. If applicable, please provide the cost of each required material for each
type of service attachment;
e. A breakdown of costs showing how much of that price is travel cost, labor
cost, material cost, or any other costs that contribute to the final proposed cost.
RESPONSE TO REQUEST NO. 10: Idaho Power's analysis on construction
costs is based on travel time, equipment, labor, and materials. The Company
construction costs are determined by the standard construction staffng level, the
equipment that is required to complete the work, the time it takes to safely finish a
project, and the travel time to the construction destination. Currently, Idaho Power uses
a computer software system called "Asset Suite" to track material expenses and
determine construction costs.
a. The crew size for an underground service is a 2 person crew, determined
by the Company's standard construction staffng leveL.
b. Travel time is based on average travel time, which is 0.5 hours. In urban
areas, traffic constraints may cause delays greater than 0.5 hours, and in rural areas,
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY -16
Attachment NO.6
Case No. IPC-E-08-22
Idaho Power Reply Comments
Page 3 of4
remote location may require travel time greater than 0.5 hours, but, on average, travel
time to jobs is approximately 0.5 hours.
c. Labor cost is a combination of travel time and "wrench time." Wrench time
includes time spent doing the work and vehicles used. Wrench time has been
calculated using time and motion studies that have been integrated into the work order
construction and inventory system.
d. Underground service cable charges are for material only, based on 100
feet, and are as follows:
e.1/0 service includes:
4/0 service includes:
350 service includes:
1/0 Wire
4/0 Wire
350 Wire
Travel and vehicles.
Materials
Labor & Equipment
Overhead Service Differential
Total
Travel and vehicles
Materials
Labor & Equipment
Overhead Service Differential
Total
Travel and vehicles
Materials
Labor & Equipment
Overhead Service Differential
Total
$ 94.97
$151.58
$262.56
$ 53.80
$ 94.97
$217.79
..$155.00~
$211.56
$ 53.80
$151.58
$215.23
..$155.00~
$265.61
$ 53.80
$262.56
$245.64
..$155.00~
$407.00
The response to this Request was prepared under the direction of Scott Sparks,
Senior Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 17
Attachment NO.6
Case No. IPC-E-Q8-22
Idaho Power Reply Comments
Page 4 of4
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-22
IDAHO POWER COMPANY
ATTACHMENT NO.7
Roadway
Agency
Jurisdiction
RELOCATIONS FLOWCHART
Roadway Agency receives
road widening or
improvement request.
l
Roadway Agency determines that Idaho Power must
relocate its facilities in public right-of-way to
accommodate road improvement and notifies Idaho
Power Company pursuant to i.C. ~ 62-705.
l
Roadway Agency determines the percentage amount, if
any, a road improvement wil benefit a third part.
Roadway Agency charges third part for its portion of
roadway improvement costs.
l l
AGENCY
IDAHO POWER
COMPANY
Collects third-part's "\
percentage share of
relocation costs based on
same percentage
Roadway Agency charged
third-part
l
Performs relocation of
utility facilities
l
Dispute resolution .-l
(if needed)
Collects third-part's
percentage share of
road improvement costs
l
Constructs
improvement
IPUC
Jurisdiction
Attachment No. 7
Case No. IPC-E-08-22
Idaho Power Reply Comments
Page 1 of 1